KYOTO PROTOCOL (1997)

The Kyoto Protocol is an international treaty which extends the 1992 United Nations Framework Convention on Climate Change (UNFCCC) that commits State Parties to reduce greenhouse gases emissions. The Kyoto Protocol was adopted at the third session of the Conference of Parties to the UNFCCC (COP 3) on 11 December 1997 in Kyoto, Japan and entered into force on 16 February 2005. Only Parties to the UNFCCC can become Parties to the Kyoto Protocol.

The Kyoto Protocol implemented the objective of the UNFCCC to fight global warming by reducing greenhouse gas concentrations in the atmosphere to "a level that would prevent dangerous anthropogenic interference with the climate system". The Protocol is based on the principle of common but differentiated responsibilities: it puts the obligation to reduce current emissions on developed countries on the basis that they are historically responsible for the current levels of greenhouse gases in the atmosphere.

The Protocol’s first commitment period started in 2008 and ended in 2012. A second commitment period was agreed on in 2012, known as the Doha Amendment to the protocol, not entered into forced yet.

According to the treaty, Annex I Parties who have ratified the treaty must have fulfilled their obligations of greenhouse gas emissions limitations established for the Kyoto Protocol's first commitment period (2008–2012). The first period emission reduction commitments expired on 31 December 2012. These emissions limitation commitments are listed in Annex B of the Protocol.

The main feature of the Protocol is that it established legally binding commitments to reduce emissions of greenhouse gases for Annex I Parties. The commitments were based on the Berlin Mandate, which was a part of UNFCCC negotiations leading up to the Protocol.

The Berlin mandate was recognized in the Kyoto Protocol in that developing countries were not subject to emission reduction commitments in the first Kyoto commitment period. However, the large potential for growth in developing country emissions made negotiations on this issue tense. In the final agreement, the Clean Development Mechanism was designed to limit emissions in developing countries, but in such a way that developing countries do not bear the costs for limiting emissions.

The Protocol also reaffirms the principle that developed countries have to pay billions of dollars, and supply technology to other countries for climate-related studies and projects. The principle was originally agreed in UNFCCC. One such project is The Adaptation Fund that has been established by the Parties to the Kyoto Protocol of the UN Framework Convention on Climate Change to finance concrete adaptation projects and programmes in developing countries that are Parties to the Kyoto Protocol.

In order to meet the objectives of the Protocol, Annex I Parties are required to prepare policies and measures for the reduction of greenhouse gases in their respective countries. In addition, they are required to increase the absorption of these gases and utilize all mechanisms available, such as joint implementation, the clean development mechanism and emissions trading, in order to be rewarded with credits that would allow more greenhouse gas emissions at home.

Under the Kyoto Protocol, 37 industrialized countries and the European Community commit themselves to binding targets for GHG emissions. The targets apply to the four greenhouse gases: carbon dioxide, methane, nitrous oxide and sulphur hexafluoride, and two groups of gases, hydrofluorocarbons and perfluorocarbons. The six GHG are translated into CO2 equivalents in determining reductions in emissions. These reduction targets are in addition to the industrial gases, chlorofluorocarbons, which are dealt with under the 1987 Montreal Protocol on Substances that Deplete the Ozone Layer.

Under the Protocol, only the Annex I Parties have committed themselves to national or joint reduction targets (formally called "quantified emission limitation and reduction objectives"). Parties to the Kyoto Protocol not listed in Annex I of the Convention (non-Annex I Parties) are mostly low-income developing countries and may participate in the Kyoto Protocol through the Clean Development Mechanism.

The Protocol defines three "flexibility mechanisms" that can be used by Annex I Parties in meeting their emission limitation commitments. The flexibility mechanisms are International Emissions Trading (IET), the Clean Development Mechanism (CDM), and Joint Implementation (JI).

International Emissions Trading (IET) allows Annex I Parties to "trade" their emissions (Assigned Amount Units). The economic basis for providing this flexibility is that the marginal cost of reducing emissions differs among countries.

The CDM and JI are called "project-based mechanisms," in that they generate emission reductions from projects. The CDM is designed to encourage production of emission reductions in non-Annex I Parties, while JI encourages production of emission reductions in Annex I Parties.

The difference between IET and the project-based mechanisms is that IET is based on the setting of a quantitative restriction of emissions, while the CDM and JI are based on the idea of "production" of emission reductions.

The production of emission reductions generated by the CDM and JI can be used by Annex I Parties in meeting their emission limitation commitments. The emission reductions produced by the CDM and JI are both measured against a hypothetical baseline of emissions that would have occurred in the absence of a particular emission reduction project. The emission reductions produced by the CDM are called Certified Emission Reductions (CERs) and reductions produced by JI are called Emission Reduction Units (ERUs).

Each Annex I country is required to submit an annual report of inventories of all anthropogenic greenhouse gas emissions from sources and removals from sinks under UNFCCC and the Kyoto Protocol. If the enforcement branch determines that an Annex I country is not in compliance with its emissions limitation, then that country is required to make up the difference during the second commitment period plus an additional 30%. In addition, that country will be suspended from making transfers under an emissions trading program.

The USA is the only signatory that has not ratified the Protocol. The Canadian government announced its withdrawal from the Kyoto Protocol on 12 December 2011, effective from 15 December 2012.